The ratings on power generation company Calpine Corp. and its subsidiaries reflect the San Jose, Calif.-based company's reliance on asset sales and contract monetizations to meet its interest payments and other fixed obligations in 2005 and 2006. In addition, the rating reflects uncertain prospects for improvements in power markets, making it unlikely that Calpine will be able to meet these obligations with internal cash flow generation. Although Calpine alleviated many of its liquidity issues regarding its 2003-2005 debt maturities through successful refinancing, asset sales, and monetizations, liquidity will remain a credit concern because covenants associated with Calpine's secured debt instruments restrict its ability to issue debt and sell assets. In addition, overall business risks are high. Calpine's business strategy is
